Harvest Fraser Richmond Organics

Harvest Fraser Richmond Organics, an indirect subsidiary of Harvest Power, a Massachusetts-based company that specializes in converting food and yard waste into biofuel, compost and fertilizer, filed for protection under the CCAA on October 12, listing approximately $23.6MM in liabilities, including $16.3MM to Harvest Canada and $5.1MM to Harvest Power. The company owns and operates a manufacturing facility in Richmond, British Columbia for processing organic waste ("Compost Facility"), as well as an electricity-producing anaerobic digestion facility ("Energy Garden"). Pursuant to agreements with various cities in the lower mainland, the company accepted organic and food waste materials from these cities for processing at its facility. In September 2016, Metro Vancouver issued an air quality management permit to the company containing requirements such as reducing the height of compost piles and replacing its composting system. Despite operating under this permit, the Compost Facility has been affected by odour complaints from neighbouring residents since 2016 and has been the subject of reporting by Vancouver media outlets. In response to these complaints, the Energy Garden eventually ceased operation in April 2017. This shut down resulted in the company being unable to meet its energy delivery obligations to the British Columbia Hydro and Power Authority ("BC Hydro") under its agreement to sell BC Hydro certain quantities of renewable energy generated by the Energy Garden. BC Hydro advised that it would bill the company $12.5M in respect of the energy delivery shortfalls to date. The company cites further reasons for its financial difficulties, including, among other things, the fact that the company had to shut down one of its composting systems under the permit, which reduced the company's revenue. In addition, as of February 2018, Metro Vancouver has diverted certain of its waste to alternate service providers for processing. During these CCAA proceedings, Maynbridge Capital will be providing up to $1.0MM in DIP financing. EY was appointed monitor. Bennett Jones is counsel to the company.